EXECUTION

Larry Bossidy & Ram

Charan
What will we learn in the
Presentation
• Why Execution is Necessary
• Seven Essential Behaviours
• Creating the Framework of
Cultural Change
• The Three Core Processes of
Execution
Why Execution is Necessary
 Three Things to Keep in
Mind
1) Execution Is a Discipline
– Execution is a systematic process of rigorously
• discussing hows and whats,
• questioning,
• Tenaciously following through,
• and ensuring accountability.
2) Execution Is the Major Job of a Business Leader.
– Many Business Leaders think that setting strategy
from the Mountain top is ENOUGH.
– In reality, only a leader can make execution happen,
through deep personal involvement
3) Execution Must Be a Core Element of a
Business Culture
– Execution must be embedded in the reward
systems and in the norms of behavior that
everyone practices.
 Building Blocks of Execution

• Building Block One

– The Leaders Seven Essential Behaviours

• Building Block Two

– Creating the Framework for Cultural Change

• Building Block Three

– Having the Right People in the Right Place
Leaders Seven Essential
Behaviours
Know your people and your
business
Insist on Realism

Set clear goals and priorties

Follow through
Reward the doers
Expand people’s capabilities
Know yourself
Know your people and
your business
• Leaders are usually out of touch with day
to-day realities
• Bulk of information reaching them is
filtered -presented by direct reports with
their own perceptions and agendas.
• Leaders need to have personal
involvement and be on the Action Field
• Personal connections with People helps
personalize the mission undertaken
 Insist on realism
• Be Realistic Yourself & then make
sure realism is the goal of all
dialogues in the organization.
• Keep an eye on whats happening
in competitor companies.
• Measure your own progress, not
internally, but externally.
• Organizations are full of people
who try to avoid or shake reality,
because it is uncomfortable, or too
revealing of mistakes made.
 Set clear goals &
•
priorities
Leaders should execute focus on a
very few clear priorities:
– Focusing on fewer (three to four)
priorities will produce the best results
from the resources at hand; and
– People in contemporary organizations
need a small number of clear priorities
to execute well.
• Along with having clear goals ,strive
for simplicity in general.
• Speak simply & directly about the
decisions.
 Follow Through
• Failure to follow through is
widespread in business and a
major cause of poor execution.
• Leaders must surface conflicts
that stand in the way of achieving
results, and create follow through
mechanisms, such as follow-up
meetings, to ensure everyone will
do what they’re supposed to.
• Clear, simple goals mean little if
nobody takes them seriously.
 Reward the Doers
• When companies don’t execute,
chances are they don’t measure,
don’t reward, and don’t promote
people who know how to get
things done
• Corporations do such a poor job of
linking rewards to performance
that there’s no correlation at all.
• If you want people to produce
specific results, you must reward
them accordingly.
 Expand People’s
capabilities through
• One of theCoaching
most important parts of a
leader’s job is passing on his or her
experience and wisdom to the next
generation of leaders, thereby expanding
the capabilities of the entire organization.
• Coaching is the single most important part
of expanding others capabilities.
“Give a man a fish, and you’ll feed him for a
day; teach a man how to fish, and you’ll
feed him for a lifetime”
 Know Yourself
• Leading an organization requires
strength of character in execution.
• Without such emotional fortitude, you
can’t be honest with yourself, deal
honestly with business and
organizational realities, or give people
forthright assessments.
• Emotional fortitude comprises
– Authenticity,
– Self-awareness,
– Self-mastery, and
– Humility.
 Building Block Two
Creating the Framework for
Cultural Change
• When a business isn’t doing well, its leaders often
think about how to change the corporate culture.
• In an Organization the Hardware(strategy & structure)
is inert without the software(beliefs & behaviours)
• Social Operating Mechanisms: a Set of processes
changing the beliefs & behaviours of people in ways
directly linked to bottom-line results.
• Cultural change gets real only when your aim is
execution.
 Operationalzing culture
A New Way of Thinking
• “We don’t think ourselves into a new way of
acting; we act ourselves into a new way of
thinking.”
• Behaviors are beliefs turned to action, the
things that deliver results. They are where
“the rubber meets the road”
• .Beliefs are conditioned by training,
experience, perceptions about what leaders
are doing & saying , what people hear inside
or outside about the company’s prospects.
• Demystify the word culture.The
culture of an organization is the
sum of its
– shared values,
– beliefs, and
– norms of behaviour

“To deliver better results,

start with examining whether
your organization’s ingrained
beliefs are helping the
business perfect its
execution.”
 Linking Rewards to
Performance
A New Way of Thinking
• Change Behavior by Changing Rewards: If a
company rewards and promotes people for execution,
its culture will change.
• People must be rewarded not simply on strong
achievements on numbers, but also on the desirable
behaviors that people adopt.
• It tells the people in the organization what’s valued
and recognized, and in the interest of trying to make
their own careers more successful, that’s where they
will concentrate.
 Social Software of
Execution
• How many meetings have we attended where
everyone seemed to agree at the end about what
actions would be taken but nothing much actually
happened as a result?
• Reason:Intimidated by the group dynamics of
hierarchy and constrained by formality and lack of
trust, they speak their lines woodenly and without
conviction.
• Lacking emotional commitment, the people who must
carry out the plan don’t act decisively.
 Social Operating
Mechanisms(SOM)
• Two things make operating mechanisms, not
just meetings.
– First, they’re integrative, cutting across the
organization and breaking barriers among units,
disciplines, work processes, and hierarchies and
between the organization and the external
environment.
– Second, SOM are where they spread the leaders’
beliefs, behaviors, and mode of dialogue
throughout the organization.
• Linked to one another SOM become Social
Operating System of the corporation
 Importance of Robust
Dialogue
• Robust Dialogue- one that brings reality to the surface
through openness, candor, and informality.
• It fosters creativity.
• Robust dialogue starts when people go in with open minds &
not with a “PRIVATE AGENDA”.
• Informality is Critical to Candor. Formality suppresses
dialogue; informality encourages it.
• It brings out reality, even if making people uncomfortable,
because it has purpose and meaning.
• It is open, tough, focused, and informal.
 Building Block Three
Having the Right people in the
Right Place
• Leaders who exclaim that “people are our most
important asset” usually do not think very hard
about choosing the right people for the right jobs.
• What leaders overlook is that the quality of their
people is the best competitive differentiator.
• Results probably won’ t show up as quickly as,
say, a big acquisition but over time, choosing the
right people is what creates that elusive
sustainable competitive advantage.
Why the Right People Aren’t
in the Right Jobs
Lack of Knowledge

Lack of Courage
The Psychological Comfort
factor
Bottom Line:Lack of Personal
commitment
Lack of Knowledge
• Define the job in terms of its three or
four nonnegotiable criteria — things
the person must be able to do to
succeed.
• Every business needs a discipline
that is embedded in the people
process, with candid dialogues about
the matches between people and
jobs.
• Follow-through that ensures people
take the appropriate actions.
 Lack of Courage
• Innumerable cases of the “wrong person
being kept in the wrong job”,
• Leader lacks Emotional Fortitude
– to take decisive action
– confront the person,
– and make a change.
• If the non-performer is high enough in the
organization, he or she can be
particularly destructive.
• Leaders fail to hole people accountable
for their “Poor Performance”
The Psychological Comfort
• Jobs areFactor
filled with the wrong people
because leaders who promote them
are comfortable with them, and the
employees are loyal to those leaders.
• However, if loyalty is based on the
wrong factors (social reasons,rather
than professional, etc.), it could be
damaging.
• Breaking free of this comfort factor is
exactly what a leader must do to
bring about Change.
 Lack of Personal
Commitment
• If right people are not in the right
jobs, the problem is visible and
transparent
• Leaders need to commit as much
as 40 percent of their time and
emotional energy to
– Selecting the Right People,
– Appraising the Right People,
– Developing people
• Foundation of a great company is
the way it develops people—
providing the right experiences
 What Kind of People
are
you Looking for?
• One Energizing People
– Leader’s whose visions come true build and sustain their
people’s momentum.
• One who is Decisive on Tough Issues
– Ability to make difficult decisions swiftly and well, and act
on them & not dance around decisions without ever
making them.
• They get things done through others
– Don’t be a MICROMANAGER
• They Follow through
– Following through ensures that people are doing the
things they committed to do, according to the agreed
timetable.
 The Three Core
Processes of Execution
• The People Process
– Making the Link with Strategy & Operations

• The Strategy Process

– Making the Link with People and
Operations

• The Operations Process

– Making the Link with Strategy and People
 The People Proces
Defines who’s going to
get it there
 People Process

• The people process is more important than either

the strategy or operations processes
• If you don’t get the people process right, you will
never fulfill the potential of your business.
• A robust people process does three essential things:
– Evaluates individuals accurately and in depth.
– Provides a framework for identifying and developing
the leadership talent the organization will need to
execute its strategies in the future.
– Fills the leadership pipeline that is the basis of a
strong succession plan.
 Building Blocks
Robust People Process
1) Linkage of people to strategy
and operations;

2) Development of the leadership

pipeline;

3) Dealing with nonperformers;

4) Linking human resources to

business results.
 Linkage of People to
Strategy and Operations
• The first building block of the people
process is its linkage to the strategic
milestones Strategy Milestones
Near Term Medium Term Long Term
(0-2 years) (2-5 years) (5+ years)
Expand beyond existing Further expand Become pioneers of
product line toward penetration leapfrog technology
selling in existing customer
solutions segments

Launch new initiative to Develop intermediate Build more useful

expand services to approaches to selling alliances
installed solutions
base to new customer
segments
• Be prepared to make tough decisions.
• The strategic milestones set might necessitate a re-
evaluation of your leadership team, should you
determine that the skill sets required to meet your
near-, medium- and long-term goals will be beyond
the reach of your current staff.
• A difficult social process — no one wants to tell good
people they aren’t capable of moving to the next
level — but it must be done.
• The dialogue in the people process zeroes in on the
shift in skill mix that will be required for the new
solutions selling environment.
 Development of the
leadership pipeline
• Meeting medium- and long-term
milestones depends largely on having a
pipeline of promising and promotable
leaders
• ASSESSMENT of the Current Staff to
reveal the adequacy of your leadership
pipeline in terms of quantity and quality.
– The Leadership Assessment Summary
– The Continuous Improvement Summary
– Succession Depth & Retention Analysis
Leadership Assessment
Summary
 Leadership Assessment
Summary
Exceeds
Standard

At
Standard

Below
Standard

Below Standard At Standard Exceeds Standard

 Preface
• Execution is doing things
• Great execution delivers results by:
– Doing the RIGHT things - actions that:
• Build the brand • Increase product, service quality
• Increase customer satisfaction • Differentiate from the competition
• and loyalty • Reduce cost, expense
• Increase employee satisfaction • Improve long-term profit
• and loyalty • Increase shareholder value

• At the RIGHT time

• Ahead of the competition • When the market is ready
• Before a problem arises • When the company is ready

• In the RIGHT way

• Quickly and efficiently • With broad support, sponsorship
• Consistent with values, culture • With courage, leadership

38
Great Execution

 Execution and Results

 Characteristics
 Steps to Leading Execution
 Final Thoughts and Recommended
Reading
 Execution and Results

 “Execution is a systematic process of rigorously discussing how’s and what’s,

questioning, tenaciously following through, and ensuring accountability. …
In its most fundamental sense, execution is a systematic way of exposing
reality and acting on it.”

 “Business execution is about getting things done. The best operational

strategies in the world are not worth the paper they are written on if they
are not carried out. By implementing a system of questioning, analysis, and
follow-through, business execution is what meshes strategy with reality,
aligns teams with goals, and helps organizations achieve results. It links the
three critical elements of every business: people, strategy, and operations.”

“Execution: The Discipline of Getting Things Done”

Larry Bossidy Ram Charan, Charles Burck

40
Execution and Results
Examples:
• A world-class ballet performance
• A championship football team in action
• A renowned chef (or restaurant)
• A successful military action
• A virtuoso jazz trio
• A flawless gymnastics performance
• A great comedy routine

41
 Execution and Results

Great businesses have great execution across the board…

… in the strategic agenda, e.g.
– Brand positioning – Production strategy
– Sourcing strategy – Distribution strategy

... in the operational agenda, e.g.

– Manufacturing – Inventory management
– Supply chain management – Distribution channel
management

… in the people agenda, e.g.

– Human capital needs assessment – Employee
development
– Talent evaluation and succession – Performance
management and compensation
42
 Characteristics
Companies that execute well
• Enable robust dialogue:
– Safe, open, candid, and informal
– Challenging and probing, but grounded in realism
– Focused on how to make things better
• Set directions and make decisions that stick:
– Made swiftly, but not haphazardly
– Based in fact
– Well-defined and well-documented
• Establish accountabilities:
– Ownership for results is clear and well-documented
– Use measurable criteria for success
– Milestones for progress are established in advance
• Follow through:
– Honestly assess progress against accountabilities
– Take corrective actions as needed
– Offer help and ask for help as needed
– Reward performance, tied to results

43
 Characteristics
Execution is further enhanced by:
• Information systems and processes that
– Support informed dialogue
– Provide data for decision-making
– Tie accountabilities to business performance
– Provide a means to trace and follow through
• Organization structures that
– Clarify roles and accountabilities
– Put the right people in the right roles

44
 Characteristics
How does great execution look…
• Demonstrates continual, observable progress
• Every step adds value
– Little or no wasted motion – plan the work and work the
plan
– Reviews/approvals are not gateposts, but critical
enablers that accelerate progress
• Unflappable
– Anticipates most obstacles
– Deals gracefully with the unforeseen
• Achieves targeted results, on time, on budget – no excuses
• Appears effortless – even when it isn’t
• Looks like fun
… and feel?
• Confident and reliable
• Programmatic and repeatable
• Feels like winning

45
 Steps to Leading
Execution
• Begin with an absolute focus on results
– Measure the right standards and increase the rigor with which you
measure them
– Constantly take action; results won’t improve without it
• Take complete and personal responsibility for your group’s results
– Clearly and specifically communicate expectations and targets to the
people in your group
– Ensure that your subordinates and colleagues perceive that your
motivation for being a leader is the achievement of positive results,
not personal gain
– Know and use every group member’s capabilities to the fullest, and
provide everyone with appropriate developmental opportunities
– Increase the pace or tempo of your group
– Model the methods and strive for the results you want your group to
use and attain
46
 Steps to Leading
Execution
• Experiment and innovate in every realm under your influence
– Look constantly for new ways to improve performance
– Use results as the litmus test for continuing or implementing
leadership practices
• Determine what you need to personally improve your results
– Seek feedback from others in your organization
– Engage in developmental activities and opportunities that will
help you produce better results

47
 Final Thoughts
• Connect leadership attributes to results

• Define desired results

• Invest in human capital for employee results
• Create capabilities for organizational results
• Build equity for customer and investor results
• Leaders of great execution build other leaders

48
Know HUMAN
Your CAPITAL
People DEVELOPMENT—

SELECTING,
COACHING, &
KEEPING THE
RIGHT PEOPLE
 Companies Have Two
Kinds of Challenges

Systems People
Challenges Challenges
IF YOU CAN’T MEASURE IT—
YOU CAN’T MANAGE IT!!!
What Every Organization Needs To Know
Selectin
g the
Perform Right
ance People Effective
Feedbac Management
k

Your Productivi
Customer
Service ty
Company

Retentio
n& Team
Develop Compatibility
ment
Have you ever hired someone
who did not reach your
expectations?
 4 Invalid Hiring Criteria
Dr. Herbert M. Greenburg

• Hiring in Own Image

• Hiring Based on Experience

• Hiring Based on Education

• Pirate from Competitor

People Fail in Jobs…..
not because they can’t do the
Job….
but rather, because they don’t
match the Job.

We Hire on Competence
and Fire on Fit
Utilize All Of Your Resources
Interview 14%
+
Background
Checks & Integrity 26%
Testing
+
Personality Testing 38%
+
Ability Testing 54%

+ Testing
Interest
66%
Job Matching
+
75%

– Psychological Bulletin Vol. 96, No. 1, August 1994

Professor Mike Smith, University of Manchester
“Put the right person in the
right job, train and
motivate them, give them
an opportunity
for advancement, and your
company will grow and
prosper”
J.W. Marriott
Three building blocks
of execution:
I. Leaders with the right behavior

II. Culture rewarding execution

III. Consistent system for getting

right people in right jobs

Execution: The Discipline of Getting Things Done

—by Larry Bossidy & Ram Charan
 Building block III

“The job no leader should

delegate—Having the right
people in the right place.”

Execution: The Discipline of Getting Things Done

—by Larry Bossidy & Ram Charan
 Let’s make the leap!

Make the leap from good to great

with the
right people
– Identify key decisions.
attributes of top performers.
– Use this information, get the right people
“on the bus.”
– Promote your people into the right
positions.
– Retain top performers
– Maximize employee performance
 Exactly what will
You get?
• Targeted recruitment and selection.
• Effective promoting.
• Targeted coaching information.
• Increased productivity.
• Performance management system.
 Introducing Profiles

Why Human Capital Advantage and

Profiles International
Assessments:

A proven way to:

•Select the right people
•Maximize employee performance
•Retain your top performers
 The job match:
Select the right people
Can you “clone” top performers?

Not exactly, but you can use this

system:
– Gather information from top performers or use
information from other organizations’ top
performers, create a job match pattern (your
Benchmark).
– Assess candidates against this benchmark that you
hire people who fit!
– Get coaching and performance management
information for present and future employees.
 Why Do Organizations
Struggle So Hard With
Strategy?

1 in 10 organizations execute
their strategies successfully

Fortune Magazine, 1998

72% of CEOs believe that
executing their chosen
strategy is more difficult than
developing a good strategy

Malcolm Baldrige CEO Survey, 2002

 #5
MAKE STRATEGY A
CONTINUAL PROCESS
The Problem:
The Strategic Management Process Is Missing in Most Organizations

STRATEGY

60% of organizations
don’t link strategy & update the test the 85% of management
budgets strategy hypotheses teams spend less than
Strategic Learning Loop one hour per month on
strategy issues

BALANCED
SCORECARD

BUDGET

78% of organizations lock

budgets to an annual cycle funding Management Control Loop reporting
92% of organizations do
20% of organizations take not report on lead
more than 16 weeks to PERFORMANCE indicators
prepare a budget
Input Initiatives & Programs
Output
(Resources) (Results)
Strategy Development or Strategy
Execution? Organizations Need
Both
Strategic success requires going beyond successful strategy
1

formulation to successful strategy execution

Missed Strategic
Strategic
Sound
Strategy Formulation

Opportunity Success
Success
Flawed

Doomed
Doomed From
From
At Risk
The
The Start
Start

Flawed Sound
Strategy Execution

Source: 1
Execution: The Discipline of Getting Things Done, by Larry Bossidy, 2002.
 Strategy Execution
Challenge
There are generally accepted tools to manage finances, customers,
processes, and people. But what about strategy?

Financial Management Tools

EVA
Balance Sheets
Process Management Tools
Six Sigma
Income Statements
Supply Chain Integration
Shareholder Value Analysis Strategy Management Tools
Cycle Time Reduction

?
TQM

Customer Management Tools

Customer Satisfaction Measurement
People Management Tools
Customer Relationship Management
Core Competencies
Segmentation Analysis
Knowledge Management
One-to-One Marketing
Pay for Performance
HRIS

The Balanced Scorecard is the vehicle that fills the

Strategy Management Gap
 Balanced Scorecard
Organizations Are Achieving
Breakthrough Results
Private Sector
BREAKTHROUGH
RESULTS Public Sector

Mobil Shareholder SMDC Health System

Value
• From last to first in industry • Profitability up $23m
• ROI 6% --> 16% • Customer Satisfaction

Profitable
Wendy’s Growth City of Charlotte
International
• Mkt. Cap $2.5 --> $4b • Customer Satisfaction =
• Stock Price up 75% 70%
Customer • Public Official Award
Satisfaction

UPS Duke Children’s Hospital

• Revenues 9% • Customer Satisfaction #1
• Net Income 33% • Cost/Case 33%
Organizational
Alignment

Hilton Hotels Defense Logistics Agency

• Customer Loyalty 5% • $130MM in Savings in FY2002
• EDITDA margins 3% above • Processed $2.2B more requisitions
average Cost for its customers
Reduction
 How Did They Do It?
They Created “Strategy-
Focused Organizations”
STRATEGY:
They made strategy the central
organization agenda

FOCUSED:
They created incredible focus on the
STRATEGY strategy

ORGANIZATION:
They mobilized their employees to act
in fundamentally different ways,
guided by the strategy

The Balanced Scorecard Is a Performance Management

Program That Puts Strategy at the Center of the Process
 …Reflecting a “Natural Cause
and Effect Logic”
of Business Performance
And Realize
the Vision

Financial
Results

To Drive Financial
Success...
Customer
Benefits

Needed to Deliver Unique

Sets of Benefits to Customers...
Internal
Capabilities
To Build the Strategic Capabilities..

Knowledge, Skills, Systems, and Tools

Equip our People...
 The Balanced Scorecard
Should Tell the Story of
the Strategy
Strategic Theme: Illustrative Example: Southwest Airlines
Operating Efficiency
Financial
Profitability

More What will drive operating efficiency?”

Fewer planes
customers • More customers on fewer planes
Customer
How will we do that?
Flight Lowest
Is on time prices • Attract targeted customer segments who value
price and on time arrivals

Internal What must the internal focus be?

Fast ground • Fast turnaround
turnaround

Will our people do that?

Learning • Educate and compensate ground crew
Ground crew regarding how they contribute to the firm’s
alignment success
• Employee stockholder program
 Let’s Take a Minute to
Agree Upon Some
Common Vocabulary
Diagram of the cause and effect
relationships between strategic
Statement of
what
objectives (Strategy Map) strategy How success
must in achieving The level of Key action
Strategic Theme: achieve and the strategy performance programs
Operating Efficiency what’s will be or rate of required to
Financial critical to its measured and improvement achieve
Profitability success tracked needed objectives
More
Fewer planes
customers

Customer
Flight Lowest
Is on time prices

Objectives Measurement Target Initiative

Internal
• Fast ground • On Ground Time • 30 Minutes • Cycle time
Fast ground turnaround • On-Time • 90% optimization
turnaround Departure

Learning

Ground crew
alignment
 ASME Balanced Scorecard Strategy Map

Young Engineers Industry / F1 Grow revenue

Government through new products
Customer

Continue and global growth

C1 Become C2 Enhance
to serve our core

Financial
indispensable to relevance to Industry
customers, such as
Young Engineers & Government
Academia

F2 Sunset F3 Run a cost

C3 Identify and effective
lower-value
Address Future Markets operation
programs
and Applications

Build Communities Build Content / Knowledge Advocate and Communicate

I1 Enable self- I3 Increase & I6 Provide I7 Improve

Internal

forming communities Expand Market- effective coordination

of interest Relevant Content representation and
and advocacy effectiveness of
for the corporate
engineering communication
I2 Stimulate individual profession s
membership growth I4 Digitize &
I5 Accelerate
with different repackage
time to market
membership models content
Learning & Growth

L2 Develop future
L1 Develop new product and business volunteer leaders
development capabilities through a
culture that is adaptive, continually L3 Strengthen
evolving (risk taking), entrepreneurial environmental L4 Share best
and agile scanning and practices and
competitive lessons learned
intelligence

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